The FDCPA

The Fair Debt Collection Practices Act

The Federal Trade Commission (FTC) enforces the Fair Debt Collection Practices Act (FDCPA), which, among many functions, oversees the debt industry and prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you. It is important to learn what they can and cannot do, especially if you are experiencing debt collector harassment.

Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts, and companies that buy delinquent debts and then try to collect them. This does not pertain to the original creditor.

The FDCPA covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage.

The FDCPA doesn’t cover debts you incurred to run a business! If you run a business as a sole proprietorship, your business debts are your personal debts, so a collector is able to come after you for those debts, but you will not be protected under the FDCPA. If you use your personal credit card to buy items for the business or take out a personal loan to finance your business, you will not be protected under the FDCPA.

If you decide that you want to stop the debt collectors from contacting you, that’s easy enough!  However, if they have no way to contact you to collect on the debt, they often follow up with legal recourse. It is in your best interest to try to negotiate with your debtors and/or keep the lines of communication open until you have made a decision on how you will handle the debt.